On Tuesday afternoon, the major currency pair is slowly falling; investors are watching the debt market.
The Euro is trading downwards against the USD again. The current quote for the instrument is 1.1302.
Yesterday’s trading session was pretty calm as there were no important numbers from both the USA and the Euro Area, but today’s economic calendar will feature more statistics.
In the afternoon, the ECB Vice President Luis de Guindos Jurado is going to speak, while another ECB policymaker Peter Praet will address the media later. The ZEW Economic Sentiment report in February is of the secondary importance and rather unlikely to influence the instrument too much.
The Euro Area’s debt market is more important for the Euro. This year, European corporate bonds continue falling into distressed territory. What does it mean? It means that there are more and more bonds of companies, which can’t service debt. Such “stressed” bonds, with a secondary price of less than 90% represent nearly 11 percent of the Bloomberg Barclays High Yield Index. In total, the mid-February tallies of 80 stressed/distressed bonds, which is the highest since 2016. The worst situation is in Italy and it can really make the Eurocurrency much weaker.
In this light, discussions on the market relating to TLTRO and possible revisions of the GDP outlook and other indicators for 2019, including the key rates, seem reasonable. Indeed, the regulator may change its estimations. Influenced by all this, the Euro is predictably losing its positions.
Orgin: RoboForex
